The market for luxury buses, currently dominated by Volvo, will soon have half a dozen new entrants including leading automakers such as DiamlerChrylser India, Swaraj Mazda, Ashok Leyland, Scania and Force-MAN Motors Limited, who will be vying for a share of this niche segment.

Growing at 25 per cent annually, the luxury bus segment is dominated by Swedish major Volvo India Ltd, with an 80 per cent share. The remainder of the 1,400-unit market for these buses --  priced at Rs 40-70 lakh (Rs 4-7 million) --  is dominated by Tata Motors. However, it is the new entrants who are likely to fuel growth through new and innovative products.

Ashok Leyland, a major player in the commercial vehicle market, is set to launch a new range of models. "We will very soon introduce the inter-city luxury bus 'Luxura'. We are also working on intra-city buses, equipped with modern air-conditioning systems and other luxury features which will be brought from our current bus platform, without incurring any substantial investment," said R Seshasayee, managing director, Ashok Leyland.

The German automobile majors, DaimlerChrysler and MAN Nutzfahrzeuge and Force Motors --  MAN's Indian joint venture partner --  are to launch similar coaches this fiscal.

"Plans for the launch of luxury buses are on and we will reveal them at the right time," said Wilfried Aulbur, CEO, DiamlerChrysler India. The company has tied-up with Jalandhar-based Satluj Motor to manufacture bus bodies, after a feasibility study.

Targeting the growing corporate sector, fleet operators and inter-city operations, Chandigarh-based Swaraj Mazda will invest Rs 150 crore (Rs 1.5 billion) and launch two luxury bus models. It has set up a joint venture with a Malaysian company to build the bus bodies.

"We will initially make 13-seater and 32-seater luxury coaches priced at up to Rs 25 lakh (Rs 2.5 million). Later, we will increase capacity and introduce a top-of-the-line 40-seater model priced at around Rs 55 lakh (Rs 5.5 million), with imported air conditioners and hydraulic doors," a senior Swaraj Mazda executive said.

Targeting a larger pie, Tata Motors has joined Brazil's Marcopolo to manufacture fully-built buses with an investment of Rs 150-200 crore (Rs 1.5-2 billion). The company will launch 7,000 buses in the 16-54 seat standard bus category, and 18-45 seat luxury coaches.

The Society of Indian Automobile Manufacturers (SIAM) expects the super luxury bus market to grow five-fold to over 8,000 units in the next three years, with demand from fleet operators, airlines (for use on airport tarmacs) and tourist operators expected to soar.

Like China, where the phenomenal demand for luxury buses took the annual market from 10,000 units to over 28,000 units per annum in five years, India is expecting a similar boom.

"The Delhi High court has already ruled that no new buses should be purchased until the low-floor premium buses start operations in the Capital," said Dilip Chenoy, director-general of SIAM.